Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday higher, low confidence.
  
• ES pivot 1647.92.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Tuesday's suppressed bullish momentum made a comeback on Wednesday as the Dow gained 97 points.  We now analyze this interesting development and what it holds for Thursday.

The technicals (daily)

The Dow: Several days of sideways movement finally brought the Dow out of its month-long declining RTC and Wednesday was the bullish trigger.  Even after a 0.65% gain the indicators remain low, just recently off oversold.  With no resistance til 15K, I think we could revisit that level on Thursday..

The VIX:  And the VIX is correspondingly bearish right now.  Last night I said it "looks like it wants to go lower." and so it did, down 4.39% Wednesday to break its recent support.  But with a recent bearish stochastic crossover, an overbought RSI, and last week's gap up finally getting filled, more downside seems possible on Thursday.

Market index futures: Tonight all three futures are modestly higher at 2:41 AM EDT with ES up by 0.06%.  Es had its best day since August 22nd on Wednesday and is now clearly in an uptrend.  With rising indicators and no resistance until 1661, a move to that level looks possible on Thursday.

ES daily pivot: Tonight the pivot steps up again  from 1639.92  to 1647.92.  We remain above the new pivot, so that's bullish.

Dollar index: Last night I mentioned a bearish tri-star.  Well this unusual three day pattern completed on Wednesday, along with a bearish stochastic crossover.  With n overbought RSI and just coming off its upper BB, this might not be a bad shorting opportunity..

Euro: On Wednesday the euro exited its steep descending RTC for a bullish setup with a bullish piercing pattern.  The overnight is off a bit  but with an oversold RSI and bullish stochastic crossover, the euro looks ready to move higher on Thursday.

Transportation: The trans continue to look bullish after outperforming the Dow on Wednesday.  A bullish stochastic crossover and RSI still just oversold complete the picture.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.

Wk.# Week   % Bullish  % Bearish  NightOwl Poll SPX  Accuracy Poll

  1  12/31      40         48        -      -   1402   0/1

  2  1/7        47         30        +      +   1466   1/2

  3  1/14       52         15        +      +   1472   2/3

  4  1/22       50         21        +      +   1486   3/4

  5  1/28       44         26        +      +   1503   4/5

  6  2/5        40         36        +      +   1513   5/6

  7  2/11       43         25        +      +   1518   6/7

  8  2/19       21         43        -      -   1520   6/8

  9  2/25       30         52        -      -   1516   6/9

 10  3/4        29         39        -      -   1518   6/10

 11  3/11       41         26        +      +   1551   7/11

 12  3/18       41         37        +      +   1561   8/12

 13  3/25       31         38        +      -   1557   8/13    9/13

 14  4/1        38         38        +      x   1569   9/14    9/13

 15  4/8        32         50        -      -   1553   9/15    9/14

 16  4/15       33         50        +      -   1589   10/16   9/15

 17  4/22       19         63        -      -   1555   10/17   9/16

 18  4/29       33         58        -      -   1582   10/18   9/17

 19  5/6        50         31        +      +   1614   11/19  10/18

 20  5/13       37         37        +      x   1634   12/20  10/18

 21  5/20       50         25        +      +   1667   12/21  10/19

 22  5/28       37         33        +      +   1650   12/22  10/20

 23  6/3        29         38        -      -   1631   13/23  11/21

 24  6/10       38         38        +      x   1643   13/24  11/21

 25  6/17       32         40        +      -   1627   14/25  11/22

 26  6/24       13         46        -      -   1592   14/26  11/23

 27  7/1        25         42        -      -   1606   14/27  11/24

 28  7/8        42         29        +      +   1632   15/28  12/25

 29  7/15       48         22        +      +   1680   16/29  13/26

 30  7/22       42         19        +      +   1692   16/30  13/27

 31  7/29       39         17        +      +   1692   16/31  13/28

 32  8/5        46         27        +      +   1710   16/32  13/29

 33  8/12       32         41        -      -   1691

 34  8/19       23         54        -      -   1656

 35  8/26       23         50        -      -   1664 

 36  9/3        21         54        -      -   1633

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  The "Poll" column is how the majority of participants voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that both I and the majority of the poll voted bullish four weeks ago, so once again we were both wrong.  Therefore we continue the year with an accuracy of 16  for 32, or 50%, perfect coin-flipping territory.   The poll as a whole drops to 13 for 29 or 45% - and that's contrarian territory.

This week the poll is little changed, with bearish sentiment continuing to run quite high, no doubt partly on the basis of seasonality.  I continued to vote bearish, staying with the majority.

Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       6      5      6           0        0.545    543
July      10      2      4           4        0.875    486
August    11      3      6           2        0.813    687
September  2      0      0           0        1.000    121

     And the winner is...

The bullish forces at work for the past two nights now remain in play.  In the absence of any real bearish signs or reversal indicators, the logical call is for Thursday higher.

ES Fantasy Trader

Portfolio stats: the account remains at $108,500 after 15 trades (11 for 15  total, 6 for 6 longs, 5 for 9 short) starting from $100,000 on 1/1/13.  Tonight we continue to stand aside.